S 3352 ISCommentsClose CommentsPermalink

112th CONGRESSCommentsClose CommentsPermalink

2d SessionCommentsClose CommentsPermalink

S. 3352CommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to improve and extend certain energy-related tax provisions, and for other purposes.CommentsClose CommentsPermalink

IN THE SENATE OF THE UNITED STATESCommentsClose CommentsPermalink

June 28, 2012CommentsClose CommentsPermalink

Mr. BINGAMAN (for himself, Ms. SNOWE, and Mrs. FEINSTEIN) introduced the following bill; which was read twice and referred to the Committee on FinanceCommentsClose CommentsPermalink

A BILLCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to improve and extend certain energy-related tax provisions, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF CONTENTS.

(a) Short Title- This Act may be cited as the ‘Expanding Industrial Energy and Water Efficiency Incentives Act of 2012’.CommentsClose CommentsPermalink





(b) Amendment of 1986 Code- Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.CommentsClose CommentsPermalink





(c) Table of Contents- The table of contents for this Act is as follows:CommentsClose CommentsPermalink





Sec. 1. Short title; amendment of 1986 Code; table of contents.CommentsClose CommentsPermalink





Sec. 2. Modifications in credit for combined heat and power system property.CommentsClose CommentsPermalink





Sec. 3. Motor energy efficiency improvement tax credit.CommentsClose CommentsPermalink





Sec. 4. Credit for replacement of CFC refrigerant chiller.CommentsClose CommentsPermalink





Sec. 5. Qualifying efficient industrial process water use project credit.CommentsClose CommentsPermalink





Sec. 6. Investment tax credit for biomass heating property.CommentsClose CommentsPermalink

SEC. 2. MODIFICATIONS IN CREDIT FOR COMBINED HEAT AND POWER SYSTEM PROPERTY.

(a) Modification of Certain Capacity Limitations- Section 48(c)(3)(B) is amended--CommentsClose CommentsPermalink





(1) by striking ‘15 megawatts’ in clause (ii) and inserting ‘25 megawatts’,CommentsClose CommentsPermalink





(2) by striking ‘20,000 horsepower’ in clause (ii) and inserting ‘34,000 horsepower’, andCommentsClose CommentsPermalink





(3) by striking clause (iii).CommentsClose CommentsPermalink





(b) Nonapplication of Certain Rules- Section 48(c)(3)(C) is amended by adding at the end the following new clause:CommentsClose CommentsPermalink





‘(iv) NONAPPLICATION OF CERTAIN RULES- For purposes of determining if the term ‘combined heat and power system property’ includes technologies which generate electricity or mechanical power using back-pressure steam turbines in place of existing pressure-reducing valves or which make use of waste heat from industrial processes such as by using organic rankine, stirling, or kalina heat engine systems, subparagraph (A) shall be applied without regard to clause (ii).’.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to periods after the date of the enactment of this Act, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).CommentsClose CommentsPermalink

SEC. 3. MOTOR ENERGY EFFICIENCY IMPROVEMENT TAX CREDIT.

(a) In General- Subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new section:CommentsClose CommentsPermalink

‘SEC. 45R. MOTOR ENERGY EFFICIENCY IMPROVEMENT TAX CREDIT.

‘(a) In General- For purposes of section 38, the motor energy efficiency improvement tax credit determined under this section for the taxable year is an amount equal to $120 multiplied by the motor horsepower of an appliance, machine, or equipment--CommentsClose CommentsPermalink





‘(1) manufactured in such taxable year by a manufacturer which incorporates an advanced motor and drive system into a newly designed appliance, machine, or equipment or into a redesigned appliance, machine, or equipment which did not previously make use of the advanced motor and drive system, orCommentsClose CommentsPermalink





‘(2) placed back into service in such taxable year by an end user which upgrades an existing appliance, machine, or equipment with an advanced motor and drive system.CommentsClose CommentsPermalink





For any advanced motor and drive system with a total horsepower of less than 10, such motor energy efficiency improvement tax credit is an amount which bears the same ratio to $120 as such total horsepower bears to 1 horsepower.CommentsClose CommentsPermalink





‘(b) Advanced Motor and Drive System- For purposes of this section, the term ‘advanced motor and drive system’ means a motor and any required associated electronic control which--CommentsClose CommentsPermalink





‘(1) offers variable or multiple speed operation, andCommentsClose CommentsPermalink





‘(2) uses permanent magnet technology, electronically commutated motor technology, switched reluctance motor technology, synchronous reluctance, or such other motor and drive systems technologies as determined by the Secretary of Energy.CommentsClose CommentsPermalink





‘(c) Aggregate Per Taxpayer Limitation-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The amount of the credit determined under this section for any taxpayer for any taxable year shall not exceed the excess (if any) of $2,000,000 over the aggregate credits allowed under this section with respect to such taxpayer for all prior taxable years.CommentsClose CommentsPermalink





‘(2) AGGREGATION RULES- For purposes of this section, all persons treated as a single employer under subsections (a) and (b) of section 52 shall be treated as 1 taxpayer.CommentsClose CommentsPermalink





‘(d) Special Rules-CommentsClose CommentsPermalink





‘(1) BASIS REDUCTION- For purposes of this subtitle, the basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit so allowed.CommentsClose CommentsPermalink





‘(2) NO DOUBLE BENEFIT- No other credit shall be allowable under this chapter for property with respect to which a credit is allowed under this section.CommentsClose CommentsPermalink





‘(3) PROPERTY USED OUTSIDE UNITED STATES NOT QUALIFIED- No credit shall be allowable under subsection (a) with respect to any property referred to in section 50(b)(1).CommentsClose CommentsPermalink





‘(e) Application- This section shall not apply to property manufactured or placed back into service before the date which is 6 months after the date of the enactment of this section or after December 31, 2015.’.CommentsClose CommentsPermalink





(b) Conforming Amendments-CommentsClose CommentsPermalink





(1) Section 38(b) is amended by striking ‘plus’ at the end of paragraph (34), by striking the period at the end of paragraph (35) and inserting ‘, plus’, and by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(36) the motor energy efficiency improvement tax credit determined under section 45R.’.CommentsClose CommentsPermalink





(2) Section 1016(a) is amended by striking ‘and’ at the end of paragraph (36), by striking the period at the end of paragraph (37) and inserting ‘, and’, and by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(38) to the extent provided in section 45R(d)(1).’.CommentsClose CommentsPermalink





(3) The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item:CommentsClose CommentsPermalink





‘Sec. 45R. Motor energy efficiency improvement tax credit.’.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to property manufactured or placed back into service after the date which is 6 months after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 4. CREDIT FOR REPLACEMENT OF CFC REFRIGERANT CHILLER.

(a) In General- Subpart D of part IV of subchapter A of chapter 1, as amended by this Act, is amended by adding at the end the following new section:CommentsClose CommentsPermalink

‘SEC. 45S. CFC CHILLER REPLACEMENT CREDIT.

‘(a) In General- For purposes of section 38, the CFC chiller replacement credit determined under this section for the taxable year is an amount equal to--CommentsClose CommentsPermalink





‘(1) $150 multiplied by the tonnage rating of a CFC chiller replaced with a new efficient chiller that is placed in service by the taxpayer during the taxable year, plusCommentsClose CommentsPermalink





‘(2) if all chilled water distribution pumps connected to the new efficient chiller include variable frequency drives, $100 multiplied by any tonnage downsizing.CommentsClose CommentsPermalink





‘(b) CFC Chiller- For purposes of this section, the term ‘CFC chiller’ includes property which--CommentsClose CommentsPermalink





‘(1) was installed after 1980 and before 1993,CommentsClose CommentsPermalink





‘(2) utilizes chlorofluorocarbon refrigerant, andCommentsClose CommentsPermalink





‘(3) until replaced by a new efficient chiller, has remained in operation and utilized for cooling a commercial building.CommentsClose CommentsPermalink





‘(c) New Efficient Chiller- For purposes of this section, the term ‘new efficient chiller’ includes a water-cooled chiller which is certified to meet efficiency standards effective on January 1, 2010, as defined in table 6.8.1c in Addendum M to Standard 90.1-2007 of the American Society of Heating, Refrigerating, and Air Conditioning Engineers.CommentsClose CommentsPermalink





‘(d) Tonnage Downsizing- For purposes of this section, the term ‘tonnage downsizing’ means the amount by which the tonnage rating of the CFC chiller exceeds the tonnage rating of the new efficient chiller.CommentsClose CommentsPermalink





‘(e) Energy Audit- As a condition of receiving a tax credit under this section, an energy audit shall be performed on the building prior to installation of the new efficient chiller, identifying cost-effective energy-saving measures, particularly measures that could contribute to chiller downsizing. The audit shall satisfy criteria that shall be issued by the Secretary of Energy.CommentsClose CommentsPermalink





‘(f) Property Used by Tax-Exempt Entity- In the case of a CFC chiller replaced by a new efficient chiller the use of which is described in paragraph (3) or (4) of section 50(b), the person who sold such new efficient chiller to the entity shall be treated as the taxpayer that placed in service the new efficient chiller that replaced the CFC chiller, but only if such person clearly discloses to such entity in a document the amount of any credit allowable under subsection (a) and the person certifies to the Secretary that the person reduced the price the entity paid for such new efficient chiller by the entire amount of such credit.CommentsClose CommentsPermalink





‘(g) Termination- This section shall not apply to replacements made after December 31, 2015.’.CommentsClose CommentsPermalink





(b) Conforming Amendments-CommentsClose CommentsPermalink





(1) Section 38(b), as amended by this Act, is amended by striking ‘plus’ at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting ‘, plus’, and by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(37) the CFC chiller replacement credit determined under section 45S.’.CommentsClose CommentsPermalink





(2) The table of sections for subpart D of part IV of subchapter A of chapter 1, as amended by this Act, is amended by adding at the end the following new item:CommentsClose CommentsPermalink





‘Sec. 45S. CFC chiller replacement credit.’.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to replacements made after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 5. QUALIFYING EFFICIENT INDUSTRIAL PROCESS WATER USE PROJECT CREDIT.

(a) In General- Section 46 is amended by striking ‘and’ at the end of paragraph (4), by striking the period at the end of paragraph (5), and by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(6) the qualifying efficient industrial process water use project credit.’.CommentsClose CommentsPermalink





(b) Amount of Credit- Subpart E of part IV of subchapter A of chapter 1 is amended by inserting after section 48C the following new section:CommentsClose CommentsPermalink

‘SEC. 48D. QUALIFYING EFFICIENT INDUSTRIAL PROCESS WATER USE PROJECT CREDIT.

‘(a) In General-CommentsClose CommentsPermalink





‘(1) ALLOWANCE OF CREDIT- For purposes of section 46, the qualifying efficient industrial process water use project credit for any taxable year is an amount equal to the applicable percentage of the qualified investment for such taxable year with respect to any qualifying efficient industrial process water use project of the taxpayer.CommentsClose CommentsPermalink





‘(2) APPLICABLE PERCENTAGE- For purposes of subsection (a)--CommentsClose CommentsPermalink





‘(A) IN GENERAL- The applicable percentage is--CommentsClose CommentsPermalink





‘(i) 10 percent in the case of a qualifying efficient industrial process water use project which achieves a 25 percent or greater (but less than 50 percent) reduction in water use for industrial purposes,CommentsClose CommentsPermalink





‘(ii) 20 percent in the case of a qualifying efficient industrial process water use project which achieves a 50 percent or greater (but less than 75 percent) reduction in water use for industrial purposes, andCommentsClose CommentsPermalink





‘(iii) 30 percent in the case of a qualifying efficient industrial process water use project which achieves a 75 percent or greater reduction in water use for industrial purposes.CommentsClose CommentsPermalink





‘(B) WATER USE- For purposes of subparagraph (A)--CommentsClose CommentsPermalink





‘(i) MEASUREMENT OF REDUCTION IN WATER USE-CommentsClose CommentsPermalink





‘(I) IN GENERAL- The taxpayer shall elect one of the methods specified in clause (ii) for measuring the reduction in water use achieved by a qualifying efficient industrial process water use project.CommentsClose CommentsPermalink





‘(II) IRREVOCABLE ELECTION- An election under subclause (I), once made with respect to a qualifying efficient industrial process water use project, shall apply to the taxable year for which made and all subsequent taxable years, and may not be revoked.CommentsClose CommentsPermalink





‘(III) PROJECTED SAVINGS- The credit under subsection (a) may be claimed on the basis of a reduction in water use which is projected, by a registered professional engineer who is not a related person (within the meaning of section 144(a)(3)(A)) to the taxpayer or the installer of eligible property, to be achieved by a qualifying efficient industrial process water use project. Such projection, if used as a basis for determining the credit under subsection (a), shall be included with the return of tax.CommentsClose CommentsPermalink





‘(ii) METHODS SPECIFIED- The methods specified in this clause are--CommentsClose CommentsPermalink





‘(I) a measurement of the percentage reduction in water use per unit of product manufactured by the taxpayer, andCommentsClose CommentsPermalink





‘(II) a measurement of the percentage reduction in water use per pound of product manufactured by the taxpayer.CommentsClose CommentsPermalink





‘(b) Qualified Investment-CommentsClose CommentsPermalink





‘(1) IN GENERAL- For purposes of subsection (a), the qualified investment for any taxable year is the basis of eligible property placed in service by the taxpayer during such taxable year which is part of a qualifying efficient industrial process water use project.CommentsClose CommentsPermalink





‘(2) EXCEPTIONS- Such term shall not include any portion of the basis related to--CommentsClose CommentsPermalink





‘(A) permitting,CommentsClose CommentsPermalink





‘(B) land acquisition, orCommentsClose CommentsPermalink





‘(C) infrastructure not directly associated with the implementation of the technology or process improvements of the qualifying efficient industrial process water use project.CommentsClose CommentsPermalink





‘(3) CERTAIN QUALIFIED PROGRESS EXPENDITURES RULES MADE APPLICABLE- Rules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of this section.CommentsClose CommentsPermalink





‘(4) SPECIAL RULE FOR SUBSIDIZED ENERGY FINANCING- Rules similar to the rules of section 48(a)(4) (without regard to subparagraph (D) thereof) shall apply for purposes of this section.CommentsClose CommentsPermalink





‘(5) LIMITATION- The amount which is treated for all taxable years with respect to any qualifying efficient industrial process water use project with respect to any site shall not exceed $10,000,000.CommentsClose CommentsPermalink





‘(c) Definitions- For purposes of this section--CommentsClose CommentsPermalink





‘(1) QUALIFYING EFFICIENT INDUSTRIAL PROCESS WATER USE PROJECT-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The term ‘qualifying efficient industrial process water use project’ means, with respect to any site, a project which retrofits or expands an existing facility to implement technology or process improvements which are designed to reduce water use for systems that use any form of water in the production of goods in the manufacturing sector (as defined in North American Industrial Classification System codes 31, 32, and 33), including any system that uses water for heating, cooling, or energy production for the production of goods in the trade or business of manufacturing. Such term shall not include a project which alters an existing facility to change the type of goods produced by such facility.CommentsClose CommentsPermalink





‘(B) SYSTEMS- For purposes of subparagraph (A), the term ‘system’ does not include any system which does not encompass 1 or more complete processes.CommentsClose CommentsPermalink





‘(2) ELIGIBLE PROPERTY- The term ‘eligible property’ means any property--CommentsClose CommentsPermalink





‘(A) which is part of a qualifying efficient industrial process water use project and which is necessary for the reduction in water use described in paragraph (1),CommentsClose CommentsPermalink





‘(B)(i) the construction, reconstruction, or erection of which is completed by the taxpayer, orCommentsClose CommentsPermalink





‘(ii) which is acquired by the taxpayer if the original use of such property commences with the taxpayer, andCommentsClose CommentsPermalink





‘(C) with respect to which depreciation (or amortization in lieu of depreciation) is allowable.CommentsClose CommentsPermalink





‘(3) WATER USE-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The term ‘water use’ means all water taken for use at the site directly from ground and surface water sources together with any water supplied to the site by a regulated water system.CommentsClose CommentsPermalink





‘(B) REGULATED WATER SYSTEM- The term ‘regulated water system’ means a system that supplies water that has been treated to potable standards.CommentsClose CommentsPermalink





‘(d) Termination- This section shall not apply to periods after December 31, 2016, under rules similar to the rules of section 48(m) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).’.CommentsClose CommentsPermalink





(c) Conforming Amendments-CommentsClose CommentsPermalink





(1) Section 49(a)(1)(C) is amended by striking ‘and’ at the end of clause (iv), by striking the period at the end of clause (v) and inserting ‘, and’, and by adding after clause (v) the following new clause:CommentsClose CommentsPermalink





‘(vi) the basis of any property which is part of a qualifying efficient industrial use water project under section 48D.’.CommentsClose CommentsPermalink





(2) The table of sections for subpart E of part IV of subchapter A of chapter 1 is amended by inserting after the item relating to section 48B the following new item:CommentsClose CommentsPermalink





‘Sec. 48D. Qualifying efficient industrial process water use project credit.’.CommentsClose CommentsPermalink





(d) Effective Date- The amendments made by this section shall apply to periods after January 1, 2013, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).CommentsClose CommentsPermalink

SEC. 6. INVESTMENT TAX CREDIT FOR BIOMASS HEATING PROPERTY.

(a) In General- Subparagraph (A) of section 48(a)(3) is amended by striking ‘or’ at the end of clause (vi), by inserting ‘or’ at the end of clause (vii), and by inserting after clause (vii) the following new clause:CommentsClose CommentsPermalink





‘(viii) open-loop biomass (within the meaning of section 45(c)(3)) heating property, including boilers or furnaces which operate at output efficiencies of not less than 65 percent (measured by the higher heating value of the fuel) and which provide thermal energy in the form of heat, hot water, or steam for space heating, air conditioning, domestic hot water, or industrial process heat, but only with respect to periods ending before January 1, 2016,’.CommentsClose CommentsPermalink





(b) 30 Percent and 15 Percent Credits-CommentsClose CommentsPermalink





(1) IN GENERAL- Subparagraph (A) of section 48(a)(2) is amended--CommentsClose CommentsPermalink





(A) by redesignating clause (ii) as clause (iii),CommentsClose CommentsPermalink





(B) by inserting after clause (i) the following new clause:CommentsClose CommentsPermalink





‘(ii) except as provided in clause (i)(V), 15 percent in the case of energy property described in paragraph (3)(A)(viii), and’, andCommentsClose CommentsPermalink





(C) by inserting ‘or (ii)’ after ‘clause (i)’ in clause (iii), as so redesignated.CommentsClose CommentsPermalink





(2) INCREASED CREDIT FOR GREATER EFFICIENCY- Clause (i) of section 48(a)(2)(A) is amended by striking ‘and’ at the end of subclause (III) and by inserting after subclause (IV) the following new subclause:CommentsClose CommentsPermalink





‘(V) energy property described in paragraph (3)(A)(viii) which operates at an output efficiency of not less than 80 percent (measured by the higher heating value of the fuel),’.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to periods after the date of the enactment of this Act, in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).CommentsClose CommentsPermalink